App privacy: ultimate guide to app privacy regulations

App privacy: ultimate guide to app privacy regulations

Find out how user consent and privacy compliance influence of apps, and how the consent management SDK can help you automate the entire process.
by Usercentrics
Dec 15, 2022
App privacy: ultimate guide to app privacy regulations
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There is no clear path to growth for apps without user consent. Stronger app privacy regulations mean consent and compliance should be top priority for mobile application developers, publishers and marketers to get right.

 

In this article, find out the most important things about user consent and privacy compliance, mobile app privacy and regulations – and learn how the Usercentrics consent management SDK can help you automate the entire process with an easy-to-use, highly customizable and industry-leading solution.

Apps and privacy

The mobile application market is robust with a Sensor Tower prediction that in-app spending will reach $233 billion by 2026.

 

Yet many app developers and marketers also feel the ground shifting as data privacy regulations and industry changes (like Apple’s ATT) are causing disruption to important user acquisition factors, such as ad buying on self-attributing networks (SANs).

 

The arrival of strong data privacy regulations, in particular user consent as a key requirement for any type of personal data processing, is a major cause of this disruption.

 

However, user consent is here to stay and the digital ecosystem looks to be finally accepting this.

 

Google is ending the third-party cookie in Chrome in a couple of years, server-side tagging is fortifying data protection as it replaces third-party adtech reliance, plus more and more websites are implementing user consent in compliance with laws like the EU’s GDPR.

 

But when it comes to data privacy, the mobile application market is lacking decisively behind with 90% of popular apps in the EU in 2022 failing to respect user consent.

 

Future-proofing data strategies based on consent will be key to avoid loss of data-driven growth for any business going into the future – also on apps.

 

In Liftoft’s 2022 App Marketer Survey, user privacy was named the top industry challenge of 2022 and the biggest issue of 2023 for apps.

 

User consent and data privacy seems, then, to be top of mind for many in the mobile apps industry.

 

That’s why, in this article we want to talk more closely about the data privacy regulations affecting your app – and how the Usercentrics SDK can help you automate compliance and optimize consent rates through trustful transparency with your users.

 

In short, there’s no way around data privacy compliance for any app business, so here’s a quick overview of the most important regulations and their key requirements for apps.

 

How data privacy regulations affect apps

 

There are two types of data privacy regulations in the world: consent-based and opt-out-based.

 

 

The EU’s General Data Protection Regulation (GDPR) is a consent-based data privacy regulation that applies to any app that has users from inside the European Union.

 

Its key requirement is that if your app tracks personal data from EU users, you first need their consent to do so in a lawful way.

 

European data privacy regulations (GDPR/ePR) put the responsibility of compliance on the “data controller”, i.e. the app owner/operator/publisher.

 

This means that if your app processes any personal data from EU users, you are responsible for obtaining prior consent to do so. Many third-party SDKs on apps track lots of different data from users (like IP addresses, which are considered personal data under the EU’s GDPR) when implemented. Yet none of these third-party providers will be held responsible if user’s are denied their right to prior consent – that rests with you, the data controller.

 

GDPR Infographic

Consent-based data privacy regulations affecting apps are not limited to the European Economic Area anymore – several GDPR-like data privacy laws across the world have also taken effect, e.g. Brazil’s LGPD and South Africa’s POPIA – both requiring prior user consent before data processing.

 

Opt-out on apps

 

The California Consumer Privacy Act (CCPA) is an opt-out-based data privacy regulation that applies to apps with users from inside the state (exceptions apply according to size and revenue of company, see more here). Its main requirement is that your app must feature an opt-out-option for your users to say no to being tracked and having their data collected.

Infographic CCPA

Data privacy regulations in the US are following the opt-out model (so far five US states have passed comprehensive privacy laws), meaning that your app is allowed to start tracking personal information from users on the condition that you make it easy for them to say no and ‘opt out’ of your app’s data collection.

 

California was the first US state to enact such a data privacy regime, but more state-wide opt-out laws are emerging across the country, such as Virginia’s VCDPA and Colorado’s Privacy Act (CPA).

 

Frankly, every data privacy regulation is different and applies differently (with numerous exceptions and alternative definitions of what constitutes ‘personal data’ or ‘personal information’), so it’s difficult to sum up how they affect apps overall.

 

But in broad strokes, the world’s strong data privacy regulations create certain core requirements that have enormous impact on the apps market, especially for app marketers.

 

What are the key data privacy regulation requirements for apps?

  • Collect and securely store consent from every user before processing their personal data, including providing an easy way to change their consent choice (if you have users from the e.g. EU, Brazil, South Africa). Consent banners must enable the freely given, unambiguous, explicit consent from each user (e.g. pre-ticked checkboxes are not allowed in most consent-based laws)
  • Enable users to opt out of data collection and respect their choice (if you have users from the US). A designated button must make it easy for users to opt out of data collection and sharing (e.g. through a button called Do Not Sell My Data on your app)
  • Provide a privacy policy for full transparency into your app’s data processing, including the purposes of collection, method of processing and what third parties you share this data with (requirement in most data privacy laws around the world)

 

Heavy fines (e.g. up to € 10 million under the EU’s GDPR) and loss of customer trust are among the biggest risks for any app that doesn’t respect user consent and thereby violates compliance. Mobile apps need data protection regulation compliance just like websites, and risk just the same financial penalties too.

 

However, with the industry moving away from third-party cookies towards server-side tagging, there are additional risks down the line for app companies that don’t change their data strategies now to include consent and compliance.

 

As data privacy regulations have cemented consent as the industry paradigm, the adtech industry is restructuring to operate accordingly – e.g. with many advertisers only buying ad space on apps that can prove user consent has been collected.

 

The dependence of third-party tracking is declining and user consent is becoming crucial to more sustainable, data-driven marketing strategies – so for apps to keep up with the change (and opportunities that the change affords), implementing proper and compliant consent must be top priority.

What are the benefits of app privacy compliance?

Over the last five years, data privacy regulations and industry initiatives (like Apple’s ATT) have forced big changes, requiring businesses to think privacy by design and compliance when building data strategies for apps to track data from users.

 

Mobile app publishers and marketers are all too familiar with the “negative” effects of data privacy regulations for apps. According to a Sensor Tower report, 2022 was the first year on record where app store growth slowed down to a halt, with Apple’s ATT framework being seen as the biggest influence.

 

Some of the challenges mobile marketers are facing include users saying no to sharing private information, resulting in a loss of data and more imprecise and non-comparable performance evaluations.

 

In other words, mobile app marketers struggle with a “blindness” when it comes to creating retargeting campaigns and optimizing user experience for better retention and lifetime value.

 

Besides the challenges to user acquisition and attribution, a recent case study from Blinkist shows the steep consequences of an incorrect setup of consent banners (a 300k revenue loss).

 

It’s time for a change of perspective – consent is not an obstacle to a thriving app business, it’s a necessity and an opportunity. For apps, data privacy can be a blessing in disguise.

 

  1. Outcome-based marketing
    The new trend in mobile marketing shows performance to outcome-based marketing, which means working backward from desired customer behaviors to the factors that drive those behaviors. And user privacy is the key factor for moving to this new strategy.
  2. Brand loyalty
    Providing a positive privacy experience can increase your app’s brand preference by 43% and users are twice as willing to share their personal data with a brand they trust, according to a 2022 study by Google and Ipsos.
  3. CRM & lifecycle management
    CRM and lifecycle tactics will become more important than ever with an increased focus on user retention and remarketing campaigns. Several recent studies clearly show that consent is key to user acquisition and retention yet many apps fail to see this opportunity for building customer trust, avoiding heavy fines and growing better through future-proof data strategies by being in compliance with data privacy regulations.

 

In other words, consent is becoming a clear competitive advantage, and those who migrate first and draw up better data strategies for their companies will profit in the long run, as the internet economy is moving towards end-user consent (Google’s Consent Mode is a good example of this, so is server-side tagging).

 

As the digital ecosystem shifts from third-party tracking and client-side tagging to first-party and server-side, all businesses will have to rethink their data strategies to include consent management over the next few years – also apps.

 

All app developers/publishers need to think privacy by design – integrating consent management solutions into the core of their products. Having a functional consent solution that enables full compliance for your app is likely to result in higher acceptance rates from users (i.e. more consent and data).

 

“A prominent part of the user experience is the “privacy experience” (i.e. ATT permissions, GDPR permissions, etc.) which should also be seamlessly integrated in the journey. Having permission pop ups and banners randomly breaking your experience is becoming a no-go.”
Valerio Sudrio, Global Director, Apps Solutions @ Usercentrics

 

But navigating the complex and different legal landscapes of such data privacy laws can be very difficult for mobile app developers and marketers.

 

This is where a consent management SDK can be easily integrated to automate the entire process.

SDK App privacy guide

As a response to the requirements from data privacy laws, regtech solutions like consent management platforms (CMPs) have been invented to make life easier for websites and apps.

 

A consent management SDK automates all data privacy compliance tasks for your app – to make life easier and free up time to focus on the business of developing and optimizing great user experiences.

 

Having a consent management SDK integrated on an app can save valuable time and resources for the publishers and marketers. What’s more, it can actually help generate more user acquisitions and retention, and improve remarketing campaigns, since consented data is more valuable and more contextual.

 

User data is undoubtedly one of the biggest assets and will continue to be so. According to data privacy regulations, app marketers can’t legally run remarketing or re-engagement campaigns without user consent. Without consented user data, predictive models fail to make effective campaign optimizations.

 

When developing an app, compliance and consent must be thought into the core (privacy by design) – the better technology it employs to obtain consented personal data, the more opportunities there are for app marketers.

 

The Usercentrics Consent Management SDK is designed to fix all complex compliance issues automatically, so your app can continue thriving with data protection in mind. It helps automates all compliance requirements for your app through industry-leading technology that balances data privacy and data-driven business.

 

With support for iOS, Android, Flutter, React-Native and Unity, the Usercentrics SDK offers a flexible approach to solving data privacy compliance for mobile apps – integrated on your app in less than an hour.

 

  1. Plug-and-play. Our SDK is designed to be ready out-of-the-box: integration and maintenance efforts are minimal, just present the privacy banner when needed in your user flow, and our automated compliance technology helps take care of the rest.
  2. Tailor-made fit. We value great user experience, and for a CMP this means maximizing transparency while minimizing intrusiveness. In other words, we want users to have a seamless experience when using your app, and our SDK offers several levels of customization that will help you adapt our privacy banner to your design language, as well as enable advanced features such as Dark Mode and A/B Testing.
  3. Geotargeting for global compliance. Thanks to our remote configuration setup and location awareness, the same SDK integration will solve your privacy compliance needs regardless if your users are in Europe (GDPR), US (CCPA/CPRA), Brazil(LGPD) or any other country with comprehensive data privacy regulations.
  4. Data-driven optimization. Whether your priority is to maximize your monetization strategy or provide a personalized experience to your users, there is no doubt that you will need user insights. For this reason, optimizing your opt-in rates can make a vital business difference. The Usercentrics SDK gives you plug-and-play analytics with different levels of granularity, to track how changes to the banner influence your opt-in rates

Conclusion

The mobile apps market is bustling and growing – yet without user consent and compliance, it’ll fall behind as the industry reorients itself towards data privacy and user engagement.

 

Integrating a consent management SDK on your app can help make your data-driven business future-proof: ensuring transparency and trust with users, smarter data strategies and better remarketing campaigns.

 

If you want to have the right to user data and be able to continue to build great performance campaigns, you need user consent – there is no way around it any longer.

 

The Usercentrics SDK brings automatic and industry-leading compliance technology to your app.

 

Get in touch with one of our experts to know more about how the Usercentrics SDK can help you automate consent and compliance on your app.

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